HSE partner, Kenneth W. Africano, was recently interviewed in the Buffalo Business First article, “Simplified bankruptcy option could help Covid-19-troubled businesses land on their feet.” The article discusses part of the CARES Act that expanded the threshold of debt to $7.5 million (from $2,725,000) under federal legislation passed in 2019 and provides a simplified process for businesses to consider Chapter 11 bankruptcy.
Kenneth explained that smaller company reorganizations via Chapter 11, prior to either change, were few and far between. “They became very unpopular for smaller businesses,” he said. “It just wasn’t very viable because of the fees and the fact that you really needed a creditor to be with you the whole way.” He continues, “What the CARES Act did was redefine for a one-year period the size of the business that can participate.” He describes, “It’s significant if you are not a national or chain business. What’s happening now is it’s hitting a much larger group of businesses, and Covid-19 put a whole lot of companies into needing to think about it as an option.”
To view the article on the Buffalo Business First website, click here.